Fitch: Coca-Cola Will Not Buy Its Biggest Bottlers

NEW YORK (AP) — Fitch Ratings said Friday Coca-Cola Co., the world's biggest drinks maker, will not likely follow PepsiCo's lead in buying its biggest bottler because the financial motivation is not as compelling.

Fitch said PepsiCo's $7.8 billion acquisition of Somers, N.Y.-based Pepsi Bottling Group and Minneapolis-based PepsiAmericas produced about three times the synergies than a similar move by Coke would.

Coke's biggest bottler is Coca-Cola Enterprises Inc., which is based in Coke's hometown of Atlanta.

"We're not expecting Coca-Cola to follow suit," Fitch Associate Director Christopher Collins said in a statement.

One reason PepsiCo's acquisitions make more financial sense, Fitch said, is that its Gatorade sports drink has a separate distribution system. Buying its bottlers, therefore, eliminated redundancy in its distribution channels.

"Coca-Cola has for the most part maintained distribution of its entire beverage line-up through its bottlers," Fitch said.

Another reason the acquisitions fit for PepsiCo, and less so for Coke, is that a greater percentage of PepsiCo revenue comes from the U.S. than for Coke, so consolidating the bottlers saves PepsiCo more money than it would Coke.